.Zedrick Jr P.

Lozano
Carl Angelo Sunga
Alvin Ocampo

WRITTEN REPORT

CHAPTER 1.

The Commission on Audit: Nature of Creation, Powers and Independence.

SECTION 1. Creation and conferment of powers -Pursuant to Section 2(2), Article IX-D, 1987
Constitution, the Commission shall promulgate accounting and auditing rules and regulations to govern
the administration of the financial resources of government agencies, instrumentalities, and political
subdivisions. -In keeping with this mandate, for its primary objective among others, the Commission
shall institute control measures governing the receipts, disbursements, and uses of funds and property,
consistent with the total economic development effort of the government, and those that facilitate the
keeping, and enhance the information value, of the accounts of the government through the
promulgation of accounting and auditing rules and regulations.

SECTION 2. Constitutional and statutory safeguards. -The Constitution explicitly provides for an
independent Commission on Audit. It is not appended to the executive, legislative or judicial branch of
Government (Sec. 1(1), Art. IX-A, 1987 Const.). Its decisions, orders or rulings on cases or matters
brought before it may only be appealed to the Supreme Court on certiorari (Sec. 7, Art. IX-A, 1987
Const.) -It is expressly empowered to appoint its officials and employees in accordance with law (Sec. 4,
Art. IX-A, 1987 Const.) -The Chairman and the two Commissioners may not be removed from office
except by impeachment (Sec. 2, Art XI, 1987 Const.)

SECTION 3. Fiscal autonomy. — To further ensure its independence, the Constitution provides that the
Commission shall enjoy fiscal autonomy. Its approved annual appropriations are automatically and
regularly released (Sec. 5, Art. IX-A, 1987 Const.).

SECTION 4. Jurisdiction under the Constitution. - The Commission shall have the power, authority, and
duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and
expenditures, and uses of funds and property, owned of held in trust by, or pertaining to the
Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned
orcontrolled corporations with original charters, and on a post-audit basis: (a) constitutional bodies,
commissions and offices that have been granted fiscal autonomy under the .Constitution; (b)
autonomous state colleges and universities; (c) other government-owned or-controlled corporations
and their subsidiaries; and (d) non-governmental entities receiving subsidy or equity, directly or
indirectly, from or through the Government, which are required by law or the granting institution to
submit to such audit as a condition of subsidy or equity. -No law shall be passed exempting any entity of
the government or its subsidiary in any guise whatever, or any investment of public funds, from the
jurisdiction of the Commission on Audit (Sec. 3, Art. IX-D, 1987 Const.). It is clear, therefore, that
wherever government ownership or interest in funds and property may be found, state; audit is
required.

SECTION 5. Entities within the jurisdiction of the Commissions. -The authority and powers of the
Commission extend to the following entities: a. National Government b. Political subdivisions, provinces,
cities municipalities and barangays c. Agencies and instrumentalities of the government d. Government-
owned or-controlled corporations, including their subsidiaries e. Other self-governing boards,
commissions or agencies of the government f. Non-governmental entities subsidized by the
government, those required to pay levies or government share, those that receive counterpart funds
from the government and those that are partly funded by donations through the government (Sec.
16(1), PD 1445). g. Public utilities subject to rate and franchise audit (Sec. 15(1), PD 1445)

SECTION 6. Relationship of audit and accountability. — Auditing is an integral part of the accountability
process in government. -The concept of accountability is an integral whole, and fiscal accountability is
part of, not apart from, the larger accountability of government and government officials to the people

Chapter 2. Audit Functions SECTION 7. The conducts of comprehensive audit. -Ensuring efficiency,
economy and effectiveness in the operations of government" leads the Commission on Audit to adopt
comprehensive audit. Financial, compliance and performance audits comprise comprehensive audit. Any
other audit is a limited-scope audit or variable-scope audit.

SECTION 8. Audit of debts and claims. — The authority of the Commission extends to the examination,
audit and settlement of all debts and claims of any sort due from or owing to the Government or any of
its subdivisions, agencies and instrumentalities (Sec. 26, PD 1445). -In the case of deeds to property
purchased by any government agency, the Commission shall require a certificate of title entered in favor
of the government or other evidence satisfactory to it that the title is in the name of the government

SECTION 9. Auditor's Certificate of Balance. — Auditors of all government agencies shall certify the
balances arising in the accounts settled by them to the Commission and to the proper treasurer,
collecting officer, in such form as the Commission may prescribe, within sixty (60) days from the date of
receipt of those accounts from the treasurer, collecting officer, disbursing officer or other accountable
officers concerned (Sec. 81, PD 1445). -A charge or suspension which is not satisfactorily explained
within ninety (90) days after receipt of the certificate or notice by the accountable officer concerned
shall become a disallowance unless the Commission or auditor concerned, in writing and for good cause
shown, extends the time for answer beyond ninety days.
SECTION 10. Opening and revision of settled accounts. — At any time before the expiration of three (3)
years after the settlement of any account by an auditor, the Commission may motu proprio review and
revise the account or settlement and certify a new balance. For this purpose, it may require any account,
vouchers, or other papers connected with the matter to be forwarded to it. -When any settled account
appears to be tainted with fraud, collusion, or error of calculation, or when new and material evidence is
discovered, the Commission may, within three (3) years after the original settlement, open the account,
and after a reasonable time for reply or appearance of the party concerned, may certify thereon a new
balance. -The decision of the Commission or any auditor in the settlement of accounts or claim becomes
final and executory it not appealed by the aggrieved party within six (6) months from receipt of the
decision (Sec. 48 & 51, PD 1445)

SECTION 11. Rule-making authority for accounting and auditing. — The Commission on Audit shall have
the exclusive authority, subject to the limitations in Article IX-D, 1987 Constitution, to define the scope
of its audit and examination, establish the techniques and methods required therefor, and promulgate
accounting and auditing rules and regulations, including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government
funds and property (Sec. 2(2), Art. IX-D, 1987 Const.)

SECTION 12. Recommendatory function for improving efficiency and effectiveness of government
operations. — The Commission shall recommend measures necessary to improve the efficiency and
effectiveness of operations of the Government, its subdivisions, agencies, and instrumentalities,
including government-owned or-controlled corporations -The Commission performs this function
through the conduct of performance audit which include economy, efficiency and effectiveness audits

SECTION 13. The Commission and the fiscal responsibility of agency heads. - One primary objective of
the Commission is to determine whether or not the fiscal responsibility that rests directly with the head
of the government agency has been properly and effectively discharged (Sec. 25(1), PD 1445). -The head
of an agency and all those who exercise authority over the financial affairs, transactions, and operations
of the agency, shall take care of the management and utilization of government resources in accordance
with law and regulations, and safeguarded against loss or wastage to ensure efficient, economical, and
effective operations of the government

SECTION 14. Quasi-judicial function. — The Constitution provides for the quasi-judicial power of the
Commission Section 7, Article IX-A, 1987 Constitution states that the Commission shall decide any case
or matter brought before it within 60 days from the time of submission. By constitutional sanction, the
decision, order or ruling of the Commission may be brought to the Supreme Court on certiorari by the
aggrieved party.

SECTION 15. Nature of COA audit of money claims. — The audit of money claims is plainly an
adjudicatory process whereby the auditor's decision is based upon vouchers, reports and other
documents on record which are within reach of accountable officers. It is not an adversary process that
would entail the formality and the ritual of a hearing peculiar to administrative proceedings.

Section 16. Adjudicatory function - is initially exercised by auditors in the settlement of accounts or
claims. In this section, describes the legal process that helps expedite and deliver a court's resolution
regarding an issue between two parties.
Section17. In this section, the chairman or any commissioner of the commission, central office
directions, regional directors, auditors of any government agency, and other official including employee
of the commission, they have the power to summon or invetigate the facts of the case that brought
before the Commission resolution.

Section 18. In this section, the authority of public institutions, such as Congress or a court, to penalize
anyone who disrespect their rules, decisions, or processes. The contempt power is intended to give
judges a way to maintain the honor of the judicial system.

Section 19. To submit to the President and the Congress a comprehensive report on the conduct of each
election, plebiscite, initiative, referendum or recall.

Section 20. Audit can be done internally by employees or heads of a particular department and
externally by an outside firm or an independent auditor. The idea is to check and verify the accounts by
an independent authority to ensure that all books of accounts are done in a fair manner and there is no
misrepresentation or fraud that is being conducted.

Section 21. In this section, refers to the power of a regulator or superintendent to inspect, examine,
supervise, and regulate the affairs of an entity. (Among the non-governmental entities subject to
Visitorial authority of the commission of the following:)

a.participating agencies in family planning programs which have to be audited yearly as required by the
donor countries/entities
b.electric cooperatives organized under PD No. 269;
c.water districts, funded by loans from the Local Water Utilities Administration (LWUA);
d.area marketing cooperatives;
e.arrastre and stevedoring services;
f.some amusement corporations; and
g. schools given subsidy by the government; and
h.others as may be provided by law.

Section 22. a "examining authority" is a self-regulatory organization registered with the Commission in
accordance with this chapter (other than a registered clearing agency) that has the power to check,
inspect, and otherwise monitor the operations of a registered broker or dealer.

Section 23. The Commission shall have the power to examine under oath any official or employee of the
said public utility.Any public utility refusing to allow an examination and audit of its books of accounts
and pertinent records

Section 24. To settle an account can also mean completing the offset process between two or more
parties in an agreement. If two or more parties agree to an offset, they may agree to exchange goods or
services rather than money. Or, the parties may agree to pay a lower price in exchange for goods or
services. This results in one or more parties having a positive balance.
Section 25. The court may authorize the personal representative, without the necessary non-
intervention powers, to compromise and compound any claim owing the estate. Unless the court has
restricted the power to compromise or compound claims owing to the estate. A claim may be
compromised if there is a real doubt concerning the Government's ability to prove its case in court for
the full amount claimed, either because of the legal issues involved or a bona fide dispute as to the
facts.

SECTION 26. Mode of Appeal from a Decision of the Commission. The Constitution specifically authorizes
an aggrieved party to appeal a decision, order or ruling of the Commission by certiorari directly to the
Supreme Court within thirty (30) days from receipt of the Commission's final ruling on the case. When
the decision, order or ruling adversely affects the interest of any government agency, the appeal may be
taken by the proper head of that agency. Chapter 3. Non-Audit Functions

SECTION 27. Accounting Function. The keeping of the general accounts of the government by the
Commission, as mandated by the Constitution is an exceptional function of a supreme audit institution.

SECTION 28. Custodial Function. The Commission acts as the official repository of vouchers or
documents relative to the general accounts of the government.

SECTION 29. Preservation of vouchers. The Constitution confers upon the Commission the preservation
of the vouchers pertaining to the general accounts of the government. Auditors or designated records
custodian in all auditing units shall have the custody, and be responsible for the safe-keeping and
preservation of paid expense vouchers, journal vouchers, stubs of treasury warrants or checks, reports
of collections and disbursements and similar documents, together with their respective supporting
papers. Auditors shall preserve the vouchers and documents enumerated in the preceding paragraph for
a period of ten years from the date of payment/collection.

SECTION 30. Production of Vouchers and Documents. It is the policy of the Commission to make
available vouchers, documents, or records which are in the custody of its auditors only when the same
are to be used as evidence in administrative, judicial or quasi-judicial proceedings in response to an
appropriate subpoena duces tecum or official request by proper law enforcement/investigative
authorities.

SECTION 31. Initiation of criminal, civil, or administrative action. Pursuant to its constitutional power to
examine, audit and settle all accounts of the government, the Commission may initiate, in the proper
forum, an appropriate criminal, civil or administrative action against any government officer or
employee, or even private persons, whenever upon examination, audit, or settlement of an account or
claim, a violation of law or regulation is discovered or disclosed.

SECTION 32. Collection of Indebtedness Due the Government. The Commission shall, through proper
channels, assist in the collection and enforcement of all debts and claims, and in the restitution of all
funds or the replacements or payment at a reasonable price of property found to be due the
government, or any of its subdivisions, agencies or instrumentalities, or any government-owned or
controlled corporation or self-governing board, commission or agency of the government, in the
settlement and adjustment of its accounts. If any legal proceeding is necessary to that end, the
Commission shall refer the case to the Solicitor General the Government Corporate Counsel, or the legal
staff of the creditor Government office or agency concerned to institute such legal proceeding. The
Commission shall extend full support in the litigation. All moneys due and payable shall bear interest at
the legal rate from the date of written demand by the Commission.

SECTION 33. Seizure of the Office of a Local Treasurer. Under the law of public officers, a public officer
should not perform incompatible functions. Although the functions of a local treasurer and those of an
auditor are incompatible, the auditor's prerogative to seize the office of a local treasurer, in appropriate
cases, is an exception provided for by law.

SECTION 34. Power to Place under Constructive Distraint the personal property of an Accountable
Officer. This is a summary process where the distraining officer does not take actual possession of the
personal property distrained but leaves them, under receipt, with the defalcating accountable officer
who shall be obligated to preserve the same intact and unaltered, and not dispose of the same without
the express authority of the Commission. The grant of power ensures the collection of the amount
covering the shortage from the erring accountable officer. It also serves as a deterrent against infidelity
of accountable officers in their custody of public funds and property.

SECTION 35. Other non-audit functions. Other functions of the Commission on Audit pertaining to the
following are discussed in succeeding sections of this Manual. a. Grant of relief from accountability. b.
Disposition of funds or property held by deceased, incapacitated, absconding, or superseded
accountable officer. c. Destruction or sale of unserviceable property. d. Request for exemption from the
use of accountable forms. e. Transfer of funds from one office to another. f. Reversion of unliquidated
balances of accounts payable. g. Transfer of unexpended balances of appropriations to the General
Fund.